Condonation of delay in Form 10-IC filing allowed where procedural lapse could not defeat the substantive Section 115BAA tax benefit.

A short, bona fide and satisfactorily explained delay in filing Form 10-IC for exercising the Section 115BAA concessional tax option may be condoned under Section 119(2)(b) where the underlying eligibility is undisputed. Filing the form is only the procedural mode of claiming a substantive statutory benefit, and a procedural lapse should not defeat that benefit when refusal would cause disproportionate hardship and no prejudice to the Revenue. On these facts, the delay arising from disruption caused by the death of a key promoter was held condonable, the rejection of condonation was set aside, and the matter was to be processed as if the form had been filed in time.

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Issues: (i) Whether the 13-day delay in filing Form 10-IC for availing the concessional tax regime under Section 115BAA deserved condonation under Section 119(2)(b) of the Income-tax Act, 1961.

Issue (i): Whether the 13-day delay in filing Form 10-IC for availing the concessional tax regime under Section 115BAA deserved condonation under Section 119(2)(b) of the Income-tax Act, 1961.

Analysis: The delay was short, supported by undisputed facts, and arose from the demise of a key promoter and family member, which disrupted the company's functioning. The option under Section 115BAA was a substantive statutory entitlement, while filing Form 10-IC was only the procedural mode for exercising that option. A procedural lapse could not defeat the substantive benefit where eligibility was not in dispute. The refusal to condone would have imposed a substantial additional tax burden and caused grave hardship, with no prejudice to the Revenue.

Conclusion: The delay was rightly condoned and the rejection of condonation was unsustainable.

Final Conclusion: The impugned order was set aside, the delay was condoned, and the respondents were required to process the matter as if Form 10-IC had been filed within time.

Ratio Decidendi: A short, bona fide and satisfactorily explained delay in filing the procedural form for exercising a substantive tax option may be condoned under Section 119(2)(b) where refusal would unjustly defeat the statutory benefit and cause disproportionate hardship without prejudice to the Revenue.

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